DraftKings revenue and losses both continue to grow in Q3

DraftKings’ revenue continued to grow year-on-year, prompting the business to raise its revenue guidance again, but losses also grew further thanks to mounting expenses and unfavourable sporting results.

Revenue was up 60.2% to $212.8m. Though this market a significant year-on-year increase, it was down from both the $297.6m recorded in Q2 and the $312.3m recorded in Q1.

The operator said that “atypical hold rates”, primarily in the first month of NFL fixtures, offset some of the benefits from new market openings.

Jason Park, DraftKings’ chief financial officer, said that if not for the unfavourable results, DraftKings’ revenue would have been significantly higher. Because of this, the operator opted to up its full-year revenue guidance again, from between $1.21bn and $1.29bn to between $1.24bn and $1.28bn.

“Fundamental user acquisition, retention and engagement trends in the third quarter were outstanding across all of our online gaming products,” Park said. “ On a same-state basis and taking into consideration lower-than-expected hold primarily due to NFL game outcomes, third quarter revenue would have been $40 million higher.

Online gaming operations made up the vast majority of this total, up 76.8% year-on-year to $176.3m, as DraftKings’ monthly unique players increased from 1.0 million to 1.3 million.

Gaming software — mostly from the legacy SBTech business — was down 18.1% year-on-year to $23.7m. Other revenue — such as media revenue from VSiN and retail betting revenue — tripled to $12.8m.

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